California's multibillion-dollar agricultural interests -- eager to expand their presence in overseas markets they say are ripe for growth - have been waiting for the World Trade Organization's 149 squabbling members to agree on how to lower tariff barriers and farm subsidies. They hope an agreement would level the playing field for doing business around the world.

The wait for trade reform began in earnest at WTO talks in Doha, Qatar, in 2001, when the United States, the European Union and Japan agreed in principle to reduce their farm subsidies and lower trade barriers in return for increased market access in developing counties.

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In December, WTO trade ministers, meeting in Hong Kong, failed to agree on details of such a plan. Convening in Geneva early this month, WTO negotiators again failed to agree. U.S. Trade Representative Susan Schwab has said Washington hopes to work out a WTO deal by the end of this year, but no formal date has been set for new talks.

Failure to forge a comprehensive WTO deal soon wouldn't seriously harm California business, said Stephen Cohen, co-director of the Berkeley Roundtable on the International Economy. But, he said, it would leave the state's farmers in a status-quo situation at a time when they are hankering to make a big break into international markets.

Mutual accusations

The United States and the EU, the world's two largest economies, have accused each other of stalling by not cutting subsidies enough, and each has waited for the other to move first.

The EU spent $133.8 billion to subsidize farmers in 2005, according to a report last week by the nonprofit Organization for Economic Cooperation and Development. Japan subsidized its farmers with $47.4 billion in handouts last year, while the United States spent $43.7 billion underwriting farmers.

Poor, developing countries, many of which rely on agriculture as a mainstay of their economies, say those subsidies make imported food from rich countries artificially cheap. Rich countries counter that developing countries' tariffs are far too high -- even on trade between poor countries -- and they cite a U.S. concession at the Hong Kong meeting to phase out American cotton subsidies this year as proof that they're trying to honor their part of the deal.

Trade experts say a comprehensive farm agreement could smooth the way for agreements on other major issues such as rules for manufacturing and protection of intellectual property.

Meanwhile, the political clock is ticking, as trade promotion authority - which gives the president power to present Congress with trade deals that can be approved or rejected but not amended -- expires June 30. Observers say politically hobbled President Bush, who won that authority by a single vote in Congress in 2002, may lose his sweeping trade authority next year. But, they say, if Congress approves a big WTO deal by then, smaller bilateral pacts with individual countries would be unnecessary, and the broad free-trade agenda could keep moving forward.

In December, almond and walnut grower Paul Wenger made the trip from his California home to Hong Kong so he could attend the WTO ministerial meeting. He said he is worried about the lack of progress in brokering an agreement.

"At some point in time, it will be too late to get a deal and get it to Congress," Wenger said, referring to Bush's endangered trade authorities powers.

Wenger, who farms 350 acres of land near Modesto, exports 70 percent of his almonds and more than 50 percent of his walnuts. Japan, the EU, South Korea and, increasingly, Thailand are among the major buyers of nuts grown by his company, in the Wenger family for three generations.

Big but protectionist markets such as India are hard to crack for nut growers in California, the world's largest producer of almonds. This is due chiefly to stubbornly high tariffs on imported foodstuffs in India. Indeed, India and Brazil, both large, developing countries, maintain tariffs of up to 400 percent on imported almonds, noted Rayne Thompson, international trade specialist at the California Farm Bureau.

Wente on ice

Eric Wente, head of Wente Vineyards, says his company has been exporting Livermore Valley wines for "50 or 60 years, and seriously so since 1978." But he said the global trade deadlock puts his firm's strategy to further expand overseas markets on ice.

"We need to see a level playing field around the world, so wines can compete on their own merits, on style, quality and price," Wente said. "The export market is part of the long-range plan of any winery. We need to be a global brand not just in California and the U.S. but around the world, so we can have the size and scale to remain family owned and operated."

Wente, whose family has owned its namesake winery since 1883, said the company "generates 25 to 30 percent of total revenue" from overseas sales and would like to expand that percentage. He said it would be easier to do if WTO-led reductions of foreign tariffs and trade-distorting producers' subsidies would come down or go away.

In affluent Japan, wine imports are slapped with a 15 percent tariff, according to San Francisco's Wine Institute. China, a huge potential wine market with a growing middle class, taxes imported wines at 14 percent. The United States taxes imported wine by 2 to 3 percent, according to Joe Rollo, director of the Wine Institute's international department.

Rollo says U.S. winemakers do not get government subsidies to produce their products. However, he said, some European winemakers do get government monies -- a policy that shores up struggling vintners in traditional winemaking countries such as Spain, Portugal, France and Italy. The U.S. winemaking industry wouldn't get large, immediate benefits from a WTO farm deal, as "it typically takes six or seven years to reduce the tariffs," Rollo said.

But U.S. winemakers support a global deal to reduce tariffs and subsidies, and they especially value the WTO's broad membership. Cutting a welter of bilateral deals with single countries, many of them small, is less desirable than forging a global pact, Rollo said, because of the need to monitor a clutter of details and agreements.

Bad time for standoff

The WTO standoff also comes at a particularly bad time for California beef producers, who have been shut out of once-lucrative Asian markets by fears of mad-cow disease in U.S. beef. Separate from the WTO wrangling, the beef bans are nevertheless tough on leading California exporters such as Harris Ranch, which helped make beef and beef products the state's 18th-largest agricultural export in 2004.

California rice growers, who produce the state's seventh-largest export crop, are also being harmed by high tariffs in potentially rich markets such as South Korea, which maintains tariffs of 40 to 140 percent on imported rice, Thompson said.

With the WTO bogged down, Washington is turning to regional and bilateral trade deals as the next-best thing to a global pact. The Bush administration is negotiating free-trade agreements with 11 countries, from tiny Oman to fast-growing South Korea.

Some of these talks, too, have slowed down. Among them is the putative deal with South Korea, which wants to include an expanding South Korean-owned manufacturing plant in communist North Korea as part of its domain. If it's included, that could give the United States a limited de facto free-trade agreement with North Korea, which Washington is trying to stop from building nuclear weapons and firing missiles across the Pacific.

In any case, bilateral deals can't take the place of the globalized WTO, said the Berkeley Roundtable's Cohen, as they distort broad free-trade principles by favoring one country over another and are, in many cases, struck with nations that have little economic heft.

"The U.S. matters a great deal to, say, Uruguay," Cohen noted. "Uruguay does not matter a great deal to the U.S."